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Colorado Farmers’ Markets, Sales Tax

  • Jun 15, 2015 | Gail Cole

 Tax may apply to certain farmers' market sales in Colorado.

Farmers’ markets are one of the best parts of summer. What’s not to love about an abundance of local produce, interesting locally produced products, live music, and community? Nothing.

Some sellers at Colorado Department of Revenue, “Persons engaged exclusively in the business of selling commodities exempt from state sales tax (such as vegetables, fruit or rice for home consumption) are not required to get a Colorado sales tax license.”

However, any vendor selling “prepared (ready-to-eat) food or other tangible property” must register to do business in the state and collect and remit all applicable taxes.

Colorado confusion

Unfortunately, it’s not as simple as “taxable” or “exempt,” “register” or “don’t register.” Colorado localities have a great deal of independence when it comes to issues of taxation, and some tax food for home consumption.

When selling in a jurisdiction that imposes such a tax, vendors must “collect and pay the local tax either on their own sales tax license account or through the account of the market organizer if the farmer/retailer is not required to have a sales tax license.”

The department reminds, “If the farmers’ market organizer is only collecting applicable local sales tax (because state sales tax is not required), the organizer can request to not pay the $50 state sales tax deposit normally required by the Colorado Department of Revenue for a retail sales tax license.”

Home rule

Please note that different rules/regulations may apply in home rule cities and counties (and there are many of those in Colorado). When selling in a home rule jurisdiction, vendors are advised to contact the jurisdiction directly to learn tax registration, collection and remittance requirements. A list of home-rule localities is available in publication DR 1002. Additional information.

Find accurate local rates for jurisdictions in all states with this free sales tax rate map.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.